Category Archives: Social Enterprises

ADB invests in Simpa Networks to Provide Rural India with Energy

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By 2015, Simpa Networks’ pay-as-you-go solar energy solution is bound to provide more than 60,000 household in rural India with better access to electricity. Supported by a $2 million equity investment by the Asian Development Bank (ADB), the company will offer an affordable clean energy solution to the underserved and underprivileged consumers in India.

Simpa Networks

The company’s mission is “to make modern energy simple, affordable, and accessible for everyone.” In order to achieve this goal, the company introduced a business model that will make sustainable energy choices affordable to the poor.

How it Works

Simpa’s pricing model is highly innovative and called Progressive Purchase. Customers make a small initial down payment for the solar system and then pre-pay for their future energy service. They can conveniently top up their systems in small user-defined increments via a m obile phone. Each of these payments also adds towards their final purchase price. Once the purchase price has fully been paid, the system unlocks permanently and continues to produce electricity without the need of any further payments.

The Importance of Energy Access

Today, there are approximately 1.6 billion people with no access to electricity and another 1 billion with only very unreliable access. Without this access, the poor depend on battery powered flashlights or kerosene lanterns for light and are unable to break the cycle of poverty as they are unable to take advantage of the numerous productive uses of energy. In addition, kerosene light comes with high operating costs, poor light quality and dangers to health and home.

Access to energy is therefore essential for every family’s economic livelihood, safety, health, educational achievement, and overall quality of life.

ADB’s Motivation to Invest

ADB hopes that the success of Simpa Networks could lead to increased venture capital funding for sustainable business models that deliver goods and services to those at the bottom of the economic pyramid.

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ARZU Studio Hope – Empowering Afghan Women

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ARZU, which means “hope” in Dari, is an innovative social enterprise that aims to empower Afghan women and their families to break the cycle of poverty, earn a steady income and gain access to education and healthcare by sourcing and selling the rugs they weave. The founders correctly understand that all lasting change begins with economic empowerment, typically in the form of small and medium sized enterprises. ARZU is structured as a 501(c)(3) in the United states and is registered as an international NGO in Afghanistan. It operates as a for-profit corporation that uses private sector practices to create jobs in poor rural areas where otherwise little job opportunity exists.

Since its establishment in 2004, ARZU has trained and employed over 1,300 rural Afghans and created direct social benefits to over 4,000 beneficiaries. It also directly and indirectly impacted the lives of tens of thousands of other villagers in the country due to the ripple effect of broad-based community development programs. Up to date, 95% of the venture’s employees were women. In this context, ARZU particularly focuses on unleashing what they call the “Girl Effect”. They do this through mandatory school attendance and internship opportunities to broaden the skillsets of the girls beyond rug weaving.

 

Primary Activities

According to the social enterprise, its primary aim is to rebuild the Afghan civil society through the development of economic opportunity. They aim to:

1)      Empower Afghan women and girls

2)      Develop local human capital through the delivery of benefits including training, education and healthcare

3)      Pilot, evaluate, and document successful and replicable enterprise initiatives, such as vocational training and best-practice model facilities that can stimulate economic growth at the community level

 

Future Outlook

The venture’s top-line goal is to become self-sufficient. Until then, it still requires funding from grants and private donors to fill the gaps. All fundraising is currently done in-house and 93% of the money raised goes directly back to the projects and beneficiaries.

Due to the expansion of rug distribution channels over the past year, and the introduction of a new, low-priced, high volume product called PEACE CORD, ARZU was able to increase its revenues (sales + funding) significantly and is now expected to become self-funding by the end of 2014.

To find out more about ARZU, their projects and their products, please visit their website >>

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SELCO India – Providing Sustainable Energy to the Poor

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Image: SELCO Website

 

I am a huge fan of SELCO India which is why I want to use my blog to introduce them. SELCO India is a social enterprise with the mission “to enhance the quality of life of underserved households and livelihoods through sustainable energy solutions and services”.

SELCO currently employs about 170 employees in Karnataka and Gujarat, spread across 25 energy service centers. Since their foundation in 1995, they have sold, serviced and financed over 115,000 solar systems to their customers!

The social enterprise was established with the aim to dispel three myths associated with sustainable technology and the rural sector as targeted customers:

1)      Poor people cannot afford sustainable technologies

2)      Poor people cannot maintain sustainable technologies

3)      Social ventures cannot be run as commercial entities.

They were able to prove those myths to be wrong! SELCO aims to and succeeds in empowering its customers by providing a complete bundle of product, service and consumer financing.

 

SELCO’s key characteristics are:

1)      Products based on end-user needs – going beyond just being a technology supplier but rather customising products based on the customers’ needs

SELCO’s systems utilise solar photovoltaic modules that generate electricity for water pumping, lighting, communications, entertainment, computing and small business appliances. These products can be purchased by both businesses and private individuals and do not need to be connected to a larger network.

 

2)      Installation and after sales service – dedicated regional energy service centers to ensure timely service and maintenance

SELCO offers high quality service for its customers and was able to build long term relationships with over 100,000 satisfied customers so far. Each of their systems is designed to meet their customers’ specific needs. The services offered include:

  • Custom system design
  • Installation
  • Training on proper system use
  • After-sales maintenance and support

 

3)      Standardised financing packages –  create attractive channels for end users to be able to afford systems based on their individual cash flow

SELCO benefits from the potential of the country’s significant rural banking system which allows them to finance sustainable energy solutions for poor rural households. So far, the company has developed partnerships with nine regional rural banks, NGOs, commercial banks and rural farmer cooperatives. These partnerships make it possible for SELCO to enable their customers to obtain the necessary credit to purchase their products.

 

Prizes won

2005: Accenture Economic Development Award

2005: Ashden Award for Sustainable Energy

2007: Ashden Award for Outstanding Achievement

2009: FT ArcelorMittal Boldness in Business Award in Corporate Responsibility

 

To learn more about SELCO, please visit their website >>

 

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LOVEQTRA – How a Tibetan Charity Learns to Stand on its Own Feet

disaster-reliefSource: LOVEQTRA Website

Research has shown that more and more charities are in the process of transforming into social enterprises, meaning that they begin to generate income in order to become independent and able to fund themselves. One great example of this development is the Tibetan NGO LOVEQTRA.

The organisation works primarily in the Qinghai Province, which is located on the Qinghai-Tibet Plateau in Northwest China. They focus on nomadic Tibetan people, who suffer from harsh living conditions and live in isolation. The NGO applies a two-step approach, the first step being intervention, followed by active support.

 

What LOVEQTRA does

The organisation’s vision is:

Transforming Generations, Restoring Lives through Transforming Minds, Restoring Hearts. Our mission is to execute justice for the oppressed, feed the hungry, clothe the naked, set free the prisoners, lift up the bowed down, and uphold the fatherless and the widow. LOVEQTRA’s flagship Operation W.O.R.T.H. centers on Women Oppressed by & Redeemed from Traditional Hegemony (W.O.R.T.H.)”

One program they focus on is “Girls at Risk”, where they help girls and women to break free from the vicious cycle of poverty, oppression and desperation. To learn more about “Girls at Risk”, please visit their website >>

A second area of the NGO’s focus is emergency medical relief. They support families and individuals who are unable to pay for emergency medical treatment. This program is co-run by a group of foreign experts who are working in Xining’s Red Cross Hospital and who raised funds and work separately to partner with LOVEQTRA. To learn more about the emergency medical relief program, please visit their website >>

LOVEQTRA’s third focus is on disaster relief.  When disasters strike, speed is the key to be able to rescue those who can still be saved. The organisation provides speedy medical care to the injured as well as food, water and shelter to the survivors. LOVEQTRA tries to support disaster stroke communities alongside the government and the Red Cross, aiding them in their relief work and helping to catch at least some of those who fall through the cracks. To learn more about the disaster relief program, please visit their website >>

 

How LOVEQTRA is trying to become more self-sufficient

In order to wean off 100% reliance on donors, LOVEQTRA decided to expand into a Social Enterprise. They have looked for ways to make themselves more self-sufficient and decided to initially expand into two main directions: becoming a simple youth hostel/guest house as well as a vegetarian restaurant and Tibetan tea house.

In order to run these operations, LOVEQTRA will train and employ some of the girls from the “Girls at Risk” program to oversee and manage the hostel, take care of facilities and keep the tidy. Those who are currently learning to cook will work in the tea house and prepare vegetarian dishes that appeal to those in the Tibetan community who, due to their beliefs, are vegetarian.

These initiatives will provide safe outlets for the older girls who can then begin to use the skills they gained in the vocational training center. Both the hostel and the tea house are in one building and will showcase some of the art works and handicrafts of the girls.

This program is still just a pilot project and will be rolled out in Dari (Darlag) County Town. If reasonably successful, LOVEQTRA plans to duplicate it in other Tibetan areas such as Yushu.

 

I believe that this is an interesting example of how pure charities begin to establish more self-sufficient operations in order to become more independent from donors. It will be exciting to see how this trend develops in the future!

 

 

 

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Korea Based Steel Conglomerate POSCO Launches Social Enterprise POSCO HUMANS

posco

Source: POSCO Website

 

Korean steel conglomerate POSCO, the world’s third largest steelmaker, is already quite well known for establishing social enterprises that have created jobs for hundreds of disabled individuals. The company’s eagerness to share growth with those marginalised from the mainstream society has been proven once more in early January 2013, when it launched the social enterprise POSCO HUMANS. The new venture is a merger of POSWITH and POSECOHousing, both established social enterprises launched by the steel group. According to POSCO, “The merger deal came for synergy effect and management efficiency. The newly established social enterprise will focus on offering jobs for socially disadvantaged people, including disabled and multicultural family members”.

POSWITH and POSECOHousing

The venture POSWITH, POSCO’s first social enterprise, was established in 2007 and enabled disabled individuals to work in cleaning or in the office supporting service areas of POSCO. It has become known for creating a unique work environment for its employees, encouraging them to laugh at least once every minute, be grateful for life three times a day and read more than two books a month. Approximately 52% of the venture’s employees are physically challenged.

The second company, POSECOHousing, was established in 2009 and also aimed to offer jobs for socially disadvantaged groups. It developed an environmentally friendly steel-housing manufacturing business and is POSCO’s largest social enterprise. Approximately 55% of POSECOHousing’s workforce possess from socially disadvantaged backgrounds.

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Entrepreneurs to Support Earthquake Recovery in Japan

Source: ETIC Website

During the last years, the Tōhoku region of Japan has been subject to an earthquake, a tsunami and a reactor meltdown. It will take the region quite some time to recover from all these catastrophes. In order to support the area in its recovery, a Tokyo-based social entrepreneurship group called ETIC launched their extremely successful Disaster Recovery Leadership Development Project in 2011.

The project is a fellowship for young business leaders, some of them coming from Japan’s biggest corporations. The fellows are sent to the slowly recovering region in Japan for 3 to 12 months and help put companies there back together, run temporary housing units and rebuild the transportation system.

Disaster Recovery Leadership Development Project

ETIC initially responded to the disasters in the region with more traditional methods, ie. sending emergency supplies and short-term volunteers. However, the organisation soon realised that they can do more than that and contribute by rebuilding the economic and social infrastructure.

So far, ETIC’s program brought 74 fellows in the region to work with 30 local social enterprises. Thirty percent of those fellows are Tōhoku natives that decided to return to and rebuild their hometowns. ETIC also announced that it is planning double the size of the program due enormous local demand.

The Future of the Tōhoku Region

ETIC’s Disaster Recovery Leadership Development Project is an excellent example of how social entrepreneurship can play an important role in disaster relief. ETIC does not only want to support the region in its recovery but push the society and economy onto a new, sustainable path.

They will have to work fast though. The local economy is not strong enough to reemploy all those individuals that lost their jobs and many residents have been living in temporary housing and on short-term government relief. With their program, ETIC aims to create what they call a “positive spiral of entrepreneurship” by bringing young and bright business leaders to the troubled region to work on an incubation program.

For more information on ETIC and their Disaster Recovery Leadership Development Project, please visit their website here >>

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DBS China Supports Social Enterprises

Percival Street

Ten days after announcing a grant to four social enterprises in Singapore, DBS, the Development Bank of Singapore, announced the launch of a new program in China. The program aims to support the development of social enterprises throughout the country. In this context, DBS China announced to provide grants to four promising social enterprises to offer training sessions to over 2 300 underprivileged individuals in Beijing, Chengdu, Shanghai and Shenzhen within the next two years. The goal is to teach them valuable skills that improve their employability. In addition, the bank plans to support and facilitate the development of sustainable business models by social enterprises.

The development programs DBS China decided to support are Baby Nursing Training for Migrant Women, Future Artist Program – Artist Talent Discovery Classes, Graphic Design Training Program for the Hearing Impaired and Dialogue in the Dark – Employable Skills Training for the Visually Impaired.

The four chosen initiatives are also supported by the Fuping Development Institute, a non-profit organisation with the purpose to alleviate poverty and promote sustainable development.

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